Should taxes be painful?

I’ve been engaged in the Property Tax debate long enough to think that I’ve heard just about every ridiculous excuse there is in opposing this shift from property to fund education to a tax on labor and product.  I didn’t think any reason or excuse would actually shock or surprise me any more but I was proven wrong on Tuesday, December 10, 2013 when Warren Hudak, Chairman of NFIB’s Small Business Tax Services, said:

“The fact that we are here and people are painfully paying a tax that they are struggling to do…that means the tax system is working”.

I want to state that I like Mr Hudak and that I also believe that he is a patriot on many reform issues that face this state but I have always believed that he is dreadfully wrong on the property tax issue and the above statement only confirms my sentiments.

In the first place, if the tax system was so painful to small business that it was resulting in the government seizing their businesses and selling those businesses for a fraction of its worth on a regular and county by county basis the way it is happening with homeowners, I believe that Mr. Hudak would be up in arms and using his paid position in the NFIB to lobby for changes.  What Mr Hudak is saying is that the pain of others is okay, as long as that pain is not inflicted on him or the companies he represents.

Mr Hudak, seems to have misplaced an understanding of the very nature of true competitive free market principles.  In such a state businesses compete for the support of consumers where the market can drive competition and prices.  In this type of market a company that provides good customer service and a reliable product allows a business to become successful.

The basis of this is recognizing the support needed from the consumer.  However, as we have moved away from a consumer controlled business environment into a government lobbyist controlled environment where grants, subsidies and tax loopholes keep a business functioning and not through the consumer base perhaps Mr Hudak no longer thinks we need the consumer to stay in business.

The less discretionary spending the consumer has the more difficult it becomes for a business to compete for that money because there is less of it to spend.  By making a tax system burdensome enough that some have lost their homes is beyond acceptable to me as I believe it should be for Mr Hudak since the small independent business is reliant on the spending of the consumer to stay in business (except where there is subsidy, grants and loopholes that aren’t available to the average homeowner – NOR SHOULD THERE BE IF WE ARE TO HAVE A FAIR SYSTEM OF TAXATION THAT EQUALLY TAXES THE SAME CLASS OF CITIZEN AT THE SAME RATE AS OUR COMMONWEALTH CONSTITUTION SAYS IT SHOULD).

The runaway property taxes most drastically impact the lower middle income families and the elderly and maybe the new mindset of the NFIB is that these consumers are not worth competing for so if they lose their homes….so what!  Then their pain doesn’t matter.

This short-sighted vision of the future ignores that as this system unfolds the property tax base becomes smaller, as statistics have clearly shown it has.  As that base becomes smaller it requires more from each person to sustain it.  This will continue to shrink the base until we will be forced to do what HB/SB 76 proposes by going to a different system to fund education and it will be at a rate that will make living in the State unaffordable to the majority of the people in the state.

Throughout this testimony on Tuesday we heard other ridiculous claims like going to a statewide regular assessments.  It is estimated that to keep property taxes remotely equitable this would have to take place every three years.  The average per county cost of a reassessment being around $10 million with 67 counties would add $223 million in cost to the state government annually.  And yet, as demonstrated in every reassessment, every where a reassessment has been conducted, they have failed to accomplish the goal of making the tax fair which results in thousands of appeals at additional cost of services, legal fees and hours to those who need to appeal.

The Property Tax is a ridiculously flawed system that simply no longer works yet some claim of the stability of the revenue from the tax while ignoring that the cost of this tax is contributing, in part, to the alleged instability of the Sales Tax.  When my taxes go up my ability to purchase goes down.  That impacts revenue to the state from the Sales Tax and its all just expanding the ever growing negative impact on the economy because of the property tax.  To now hear from a representative of the business community that thinks that my pain is good makes me question if these member and supporting groups of the NFIB agree and if so, would you please make that sentiment publicly known so I can make an informed decision as to whether or not I will continue to support you.

If you disagree, what are you going to do to hold Mr Hudak, your representative who was your voice on this issue on Tuesday the 10th of this month, accountable?  Have you made your voices heard?  Your dues as a member group of the NFIB are contributing to the ability of the NFIB to continue to lobby against us and to continue to support the notion that painful taxation of consumers who own property is a good thing, even though that pain results in less revenue to those homeowners which translates into less money to spend at your business.

I am pro-business and pro-consumer.  I don’t think that a free-market system can exist where taxation on either has to be painful.  I especially am opposed to such taxation to support a system that is not producing the results that the amount of money we are spending on it should produce.

Frankly, Mr Hudak, I find this statement to be not only offensive but totally out of character for you.  I get that when citizens feel the pain they get out and do something about it but to suggest that this is necessary or a good thing to those suffering is to say that the Holocaust was a good thing because it caused people pain; that slavery could be justified because of the pain that can be caused.  It stands in opposition to everything our founders intended for this nation under a constitutional rule of law and I know that you know better than that.

Recently there was an uproar about a certain poster even though that poster implied no  violence towards anyone but suggested using the ballot box to remove legislators who were supporting a tax which can unjustly seize the property of individuals in this state.  Now a lobbyist has suggested that we, the common citizen and property owners should be in pain in our taxation and that this is a good thing….that is a very real threat to the safety and security of every law abiding citizen in this state who owns property but through no fault of their own is in the process of being taxed out of their property.  It is a threat that states that our pain is good and if there are those whose pain goes so far as to result in losing their very home than so be it.  Where is the media outcry about that threat?

Inflicting painful taxation is a way to make people fear their government.  The entire institution and stability of the property tax is built around that sort of pain and fear.  People will do without proper food and medication for fear of losing their homes and anyone who supports this method of taxation would agree with Mr Hudak, I’m sure.  Every time somebody says that Property Taxes are stable they are saying, in kinder and gentler words, the very same thing Mr Hudak proclaimed.  At least Mr Hudak had the decency to say it honestly…sort of like when Michael Wood said that 10,000 people losing their homes each year is not reason enough to do something about the property tax.  I may think it’s horrible but at least they honestly said out loud the thing that others hide behind when they talk about the stability of the property tax.

I know of several grandparents who have told me the pain of stopping family gatherings during the holiday seasons of Easter, Thanksgiving and Christmas because they could no longer afford it because of the property tax, nor could they afford to travel to their family to be with them during the holidays.  That’s the pain Mr Hudak is talking about.  I know of others who have sold their homes, not because they wanted to but because their taxes exceeded their ability to pay, That’s more of Mr. Hudak’s pain.   I  have talked to farmers who agreed to Clean And Green against their will but it was the only way they could keep the family farm and afford the extortion of the property tax.  In each case these people made a choice but it is a false choice because it is one forced upon them, against their will to justify a system of taxation that seizes property and sells it at auction for a fraction of its worth.  You see all of this redistributive pain…pushing the pain onto a smaller and smaller class of citizens in this state for the benefit of others who will benefit from that pain, not only by escaping from it but by profits made from it.  Have we ever questioned how much the newspaper industry makes each year posting page after page of delinquent tax properties?  Could that be part of the reason they oppose us?

How much money is made by lawyers because of the countless property tax appeals?  Could that be the real reason why the Bar Association opposes us?

We already know why the State School Board opposes us even though many local school boards have come on board.  They want to control the amount of pain they levy on the taxpayer.

All of that is profiteering from our pain.  Is this what Mr. Hudak wants to see continue and is any of that in the best interest of supporting the free-market capitalist principles Mr Hudak claims to support?

It is long past time for us to look beyond the excuses being made by the opposition and to start asking the real serious questions related to their opposition.  Do they profit from the property tax at our expense and if so, then that makes them unqualified to oppose us on this legislation.  Taxation is only supposed to be for the necessary function of government.  It’s not supposed to be to empower institutions to profit from the pain of the constituents.

Now I’m sure that there will be those who will seek to justify Mr Hudak statement by saying that the pain of the property tax is a good thing because it’s gotten people engaged in the process.  I would remind those who would say this that Mr Hudak was defending the property tax and opposing SB 76.   He stated that Property Tax isn’t the problem and had his laundry list of other issues that had to be resolved and that somehow this would fix the property tax problem.

In my opinion none of those issues will ever be properly addressed until the State has to account for the spending through the state budget.  As long as they can push taxation down to the local level to support these special interest driven mandates and regulations and essentially be held unaccountable for it the things My Hudak wants to see, it will not happen.  I actually agree with Mr Hudak that every one of those things are a problem.  My experience has shown that the state legislators won’t tackle those problems until they have to pay for them.  HB/SB 76 is going to finally make that happen.

 

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